The future of selling flights won't look exactly like this. But Ricardo Pilon's ideas are helpfully provocative and may help the industry innovate.
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I’ve covered airline distribution since 2013. One of the most intriguing ideas I’ve heard on the topic has come recently from Ricardo Pilon.
- Pilon’s ideas, shared via his Substack Airline Revenue Economics, borrow heavily from concepts percolating from many sources.
- He has heard these ideas through his work at Montreal-based consultancy Millavia.
- Pilon’s main contribution is to crystallize how airlines might sell online more smartly.
Airlines complain today that they often don’t influence leisure travelers who are in the “inspiration” phase of planning. Sure, once a traveler has an itinerary in mind, they will start shopping for flights and look at airline content then. But they rarely look at airline content while dreaming and researching.
Pilon imagines there’s something he calls an “airline experience marketplace.” Here’s one brief example of how it might work:
- Imagine someone following a Moroccan chef on Instagram. Let’s say the person is inspired to visit Morocco.
- She logs into a site, or digital assistant app, where she “maintains several travel and experience playlists.” Imagine something of a mix of Spotify, Pinterest, and Lonely Planet.
- She sees and builds “playlists” of recommendations for trips, including lodging options and activities that fit her budget.
To be sure, Pilon’s idea is fantastical. But the underlying premise is based on trends that logically seem likely to affect airline marketing and online sales.
- “I am convinced that we will be approaching the plateau of ancillary revenues as incremental growth by around 2025,” Pilon said last month at an industry event. “It may only grow organically from now on.”
- “I believe that we cannot continue to stack on items by continuing to plan our customers’ engagement around flight departures,” he said. “I believe there is a true opportunity to collaborate with individuals on how their inspiration drives their search.”
Better selling requires moving away from today’s lists of flight schedules at online travel agencies.
- “True retailing requires an experience marketplace with attractive window displays as well as well-stocked shelves,” Pilon wrote. “It has more on offer than the owner’s own products and more than just one shelf.”
- Airline product offerings “should be based more on how people shop in the real world rather than ‘stackable’ sequences dictated by how we have structured airline distribution since the 1960s.”
- Pilon has brainstormed with Databricks, an American enterprise software company, about how to apply artificial intelligence to a “data lakehouse” filled with relevant signals.
- He has also developed complicated ideas about how an “airline experience marketplace” would tether an airline’s selling technique and price-setting approach to the customer’s total share of wallet, rather than to an airline’s supply and demand signals.
Pilon’s ideas echo and build on other emerging concepts.
- At business travel agency TripActions, American Airlines, Delta, and United have been displaying their flights and seats via “next-generation storefronts,” which spotlight their brand and products in ways that stand out from commoditized lists of flight options.
- This particular “airline storefront” model is supported by tech and aggregated content from ATPCO (formerly known as Airline Tariff Publishing Co.), an airline-owned tech firm.
- But the concept echoes an idea pioneered online by Alibaba. Alibaba has long run an e-commerce site called Tmall that differs from a retail marketplace like Amazon in that its default format is to have brands run their shops on it. Why can’t airlines have the same thing?
Some startups show alternative ways of helping travelers during the “inspiration phase” of trip planning. Their models hint at relevant aspects of how airlines might get smarter about selling. None of these are an immediate threat to, say, Expedia or AirAsia’s superapp. But they paint pictures of possible futures.
- Kabuk Style, a travel tech company in Nagasaki, has since November been working with JAL (Japan Airlines Corp.) on trials of a travel subscription product. Interestingly, the startup’s HafH (Home Away From Home) service, which has helped 35,000 members stay in short-term rentals on a monthly subscription model, is part of the package. The blending of flights with rentals — and the data collected from subscribers — is intriguing.
- TravelBoast is, as of this writing, the number-one most downloaded free iPhone app on the U.S. App Store in the travel category, according to analytics firm SensorTower. Why is that of interest, you ask? It lets consumers use cartoons to plan and show off their trips. It helps travelers create animated map-based videos about their trips and post them to Instagram. Can your airline app do that?
- Wanderseat lets consumers scroll through short videos from other travelers. Once inspired, a consumer can book the trip for selected U.S. departures. I mention this startup because short-form video, popularized by the social video app TikTok, appears to be influencing some travel decisions today. Airline marketers have done little to exploit the format.
New ways of shopping could be enhanced if new technologies that decentralize how information is shared become widespread.
- Semi-decentralized approaches to data sharing could encourage consumers to reveal more about their interests in return for controls against misuse and price gouging.
- These concepts build on ideas that World Wide Web founder Sir Timothy John Berners-Lee discussed at an Amadeus travel tech conference in 2019. The ideas continue to reverberate with efforts like Dtravel, a decentralized travel booking platform — which appears ready to soon announce a massive amount of investment.
- Journera appears to be gaining traction as a middleware data platform. It promises to help travel brands stitch together customer journeys to provide “seamless experiences” while obeying data-sharing rules. A few major travel brands back it.
My conclusion: There are many creative ways to inspire leisure travelers to plan trips and book travel that airlines haven’t yet tapped.
- Pilon’s ideas are big — probably too big for airline executives, who are focused on guiding their companies out of the pandemic-induced crisis.
- But the ideas suggest the outlines of how the future may unfold.
- Some companies — including perhaps one or two airlines — will profit from the coming changes.
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